OMV is selling a majority interest in its Gas Connect Austria downstream subsidiary to renewables player Verbund, one of the largest hydropower producers in Europe.

The Austrian giant said on Wednesday the deal — part of a €2 billion ($2.3 billion) divestment programme — will see Verbund take a 51% interest in Gas Connect.

Energy transition plans

For OMV, bringing Verbund on board as a majority shareholder in Gas Connect is a strategic move under its energy transition plans as it has been pursuing plans to exit the regulated gas transport business.

Gas trading and gas storage, however, will remain an important part of the OMV portfolio.

Verbund, meanwhile, said the acquisition is a key strategic move for the partly state-owned player as it moves to grow its portfolio into the transport market with an eye on moving green gasses in the region.

Michael Strugl, deputy chairman of the management board of Verbund added: “As a bridging technology, gas will continue to play a key role on the path to a renewable energy system.

"The importance of the gas network will grow significantly in future as it will increasingly be used to transport green gases such as green hydrogen.

“In the long term, we see a global hydrogen economy, one in which large quantities of energy need to be transported internationally."

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The value of the deal is €271 million but it will also include Verbund assuming the outstanding liabilities of Gas Connect to OMV on closing, which totaled €165.9 million at the end of December.

The deal is set to complete in the first half next year.

OMV tried to merge with Verbund in 2006, seeing the move as a chance to broaden its energy portfolio, but investors hated the deal at the time and the idea was abandoned.

This year, the two companies have already joined forces to build photovoltaic projects in Austria.

OMV has been pivoting its business towards gas rather than oil amid its easier links to renewables and hydrogen.

Earlier this week, OMV warned of upcoming impairments after cutting back its Brent oil price planning assumptions, reflecting a faster-paced energy transition.

The expects to report a non-cash net impairments of around €600 million post-tax in the third quarter results.